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Eurobites: BT Avoids Openreach Split

Paul Rainford
2/25/2016

Also in today's EMEA roundup: Deutsche Telekom's earnings up; ADVA's revenues rise; MTN drops Nigerian lawsuit; Cisco's Russian SON.

  • Ofcom has published its long awaited Strategic Review of Digital Communications, the nub of which examines whether BT Group plc (NYSE: BT; London: BTA) should be "structurally separated" from its network infrastructure access division, Openreach , for the benefit of the UK broadband market as a whole. In summary, the review recommends that while separation is not currently required, BT must open its ducts and poles to its rivals in a more meaningful way and that Openreach becomes more independent, making its own decisions on budget, investment and strategy. Ofcom also warns BT that it reserves the right to impose full structural separation in the future if the company isn't seen to be acting on these recommendations.

    Not surprisingly, there has been widespread reaction to the review's conclusions. Here are a few highlights:

      BT: Ofcom have today explained why breaking up BT would not lead to better service or more investment and that structural separation would be a last resort. We welcome those comments. The focus now needs to be on a strengthened but proportionate form of the current model and we have put forward a positive proposal that we believe can form the basis for further discussions with both Ofcom and the wider industry.

      TalkTalk: Ofcom has produced 100 pages of consultation with little concrete action behind it. The risk is that we end up with 10 more years of debate and delays, rather than facing into the problems and delivering improvements for frustrated customers now.

      Sky: Ofcom's actions today are not the end of the debate but a staging post towards delivering the network and service that Britain needs. We believe the simplest and most effective way to fix the current broken market structure is for Openreach to be completely independent. We are pleased to see that separation is still on the table.

      Cityfibre: It is clear from Ofcom's key strategic proposals that Openreach cannot and will not be allowed to remain solely responsible for delivering the fit-for-purpose infrastructure essential to fulfil the UK’s digital potential.

    (See Ofcom Does Not Rule Out BT Carve-Up and Vodafone CEO: I Want a Piece of Openreach.)

  • Deutsche Telekom AG (NYSE: DT) saw adjusted EBITDA rise 13.3% year-on-year to €19.9 billion (US$21.9 billion) in its full-year results. Overall revenues rose by 10.5%, to €69.2 billion ($76.3 billion), though revenues in its European territories actually fell 2% to €12.7 billion ($14 billion). T-Mobile US Inc. more than played its part, growing much faster during the period than its rivals, claims DT, and increasing revenues by 8.1% to $32.1 billion. In terms of customer numbers, there was a 6.8% slide across DT's European mobile segment, to 52.18 million, while T-Mobile US saw a healthy 15% jump, to 63.28 million.

    Table 1: DT: Customer Numbers Y-o-Y Comparison (Europe Segment)

    Dec. 31, 2015 (thousands) Dec. 31, 2014 (thousands) Change (thousands) Change (%)
    Mobile customers 52,183 55,992 -3,809 -7
    Of which contract customers 25,902 25,400 502 2
    Fixed-network lines 8,700 9,033 -333 -3.7
    Of which IP-based 4,100 3,486 614 17.6
    Retail broadband lines 5,181 4,995 186 3.7
    Television (IPTV, satellite, cable) 3,904 3,714 190 5.1
    Source: Deutsche Telekom

  • Optical and Ethernet equipment vendor ADVA Optical Networking (Frankfurt: ADV) has reported a significant increase in fourth quarter and full year revenues. The Munich-based company generated revenues of €111.8 million ($123.2 million) in the final quarter of last year, a year-on-year increase of 28.8%, attributing that growth to demand for metro 100G and data center interconnect (DCI) systems. The company also announced full year revenues of €441.9 million, an increase of 30.3% over 2014's numbers. (See ADVA Reports Significant Increase in 2015 Revenues .)

  • South Africa's MTN Group Ltd. has dropped its lawsuit against the Nigerian government over the $3.9 billion fine it received for failing to disconnect unregistered SIM cards, reports Reuters. It has also paid $250 million as part of a possible settlement. (See MTN to Challenge $3.9B Fine in Nigerian Court, Eurobites: Mega-Fine Topples MTN CEO and Eurobites: MTN Shares Suspended After $5.2B Fine.)

  • Russia's Mobile TeleSystems OJSC (MTS) (NYSE: MBT), working in partnership with Cisco Systems Inc. (Nasdaq: CSCO), has completed what the operator describes as the country's first network that can "self-adjust" to subscribers' needs -- or in other words a self-optimizing network (SON). The technology has been put to work in MTS's 3G network in Moscow and the surrounding area.

    — Paul Rainford, Assistant Editor, Europe, Light Reading

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    thebulk
    thebulk
    2/29/2016 | 6:05:37 AM
    Maybe later
    It would seem that they have avoided it so far, but they still might have to face the music down the road again dpending on how business developes. 
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